Another newbie

[Fattony81]

TBH, I would not even comment on this stock, as it's average volume is only 889K. If you get serious about making money trading, then you have to go with the best risk/reward candidates, and, as mentioned, I believe them to be US blue chip stocks. Why would you want to trade anything that carries higher risk in relation to reward, and sticking with your own country is silly if the only reason is for loyalty.

I am Irish and I would not trade Irish stocks, for many reasons, but the main one as mentioned above. If you use your head correctly, then you have a good chance to outsmart those are outsmarting you all of your life, but you must put your own interests first, above all else.

You may not realize it, but you are looking for someone to tell you you are doing the right thing, which is the wrong thing to do if you want to make any real progress.

Trading will be as simple, or as complicated, as you make it yourself.

Lúidín

I guess I am looking for encouragement yes, time will tell regarding WOS this week and I'll start looking at the charts and straight line method to see if I can become consistent with the trades.

I never considered US stocks, I guess it has its perks ie its running in the evening rather day time, to be honest I just looked for stocks which had a lot of movement, no point it trading 10 points a week was my thinking

 

[Lúidín]

I guess I am looking for encouragement yes, time will tell regarding WOS this week and I'll start looking at the charts and straight line method to see if I can become consistent with the trades.

I never considered US stocks, I guess it has its perks ie its running in the evening rather day time, to be honest I just looked for stocks which had a lot of movement, no point it trading 10 points a week was my thinking

Yes, you are right, as many forget what it was like years ago when starting out.

Looking back, I too looked to others for help, gave some money for courses and trading rooms, and all I will say is that it done nothing but hindered my real progress.

The best teacher in any profession you take on, is experience.

Unfortunately, with trading the downside is losing all of your money during the learning process, so one has to be very smart from day one and not be sucked into thinking that others can make it happen, as the only person who can make it happen is yourself.

Of course, others can suggest certain ways, of which there are many, some less riskier than others, but having gone thru it, I truly believe the best way to trade is to keep it as simple as possible, with very small risk, and do as many trades as you can without losing too much. If you adopt this approach then the required experiences will be gained, and then you will understand what I speak about in relation to what others may show you.

If something is working, no matter what market, then stay with it. If it is not working, then don't waste time and money on it, move on and find something that does work for you, which every person can find if they make the commitment to find out what it is.

Maybe some day I will become a "vendor"..lol

Lúidín

 

[Fattony81]

Yes, you are right, as many forget what it was like years ago when starting out.

Looking back, I too looked to others for help, gave some money for courses and trading rooms, and all I will say is that it done nothing but hindered my real progress.

The best teacher in any profession you take on, is experience.

Unfortunately, with trading the downside is losing all of your money during the learning process, so one has to be very smart from day one and not be sucked into thinking that others can make it happen, as the only person who can make it happen is yourself.

Of course, others can suggest certain ways, of which there are many, some less riskier than others, but having gone thru it, I truly believe the best way to trade is to keep it as simple as possible, with very small risk, and do as many trades as you can without losing too much. If you adopt this approach then the required experiences will be gained, and then you will understand what I speak about in relation to what others may show you.

If something is working, no matter what market, then stay with it. If it is not working, then don't waste time and money on it, move on and find something that does work for you, which every person can find if they make the commitment to find out what it is.

Maybe some day I will become a "vendor"..lol

Lúidín

I guess your right, I need to find my own way to learn how to read the chart and trade based on that, Ive traded mainly construction companies and did alright in November but not much in December - still early

 

[dbphoenix]

I get your point on PSN, the price has spent too much time above your higher line which is used to work out the range so the time is not right.

Another one I look at is WOS (seems to be the construction industry!) this is the first time I've used the straight line strategy so bear with me.

I wonder if I'm reading this right, It looks like an upward trend and the range seems to be ok so its a matter of picking the entry price right, only thing I noticed is its quite a steep incline

Have a read that anywhere near right?

Not sure what you mean by the "straight line strategy". If you're referring to what I've written, the lines are simply a means of assessing the balance between demand and supply. After a while, one can do that without drawing anything at all (children can do it right away).

As to WOS, that was in an uptrend until August, but that has since been broken. The task is not so much picking the entry price right but determining whether the trend is up or down. If not that, then whether price is moving up or down. If you don't know how to do either, then picking an entry price is the least of your concerns.

Study the market. Take lots of notes. If you don't know what the scientific method is, google it. There's no need to rush into trading, particularly if you don't have a firm grasp of what you're doing. This post may be useful to you as it explains how to observe, how to test, how to develop a trading plan. If you trade without one, you may benefit temporarily if you happen to tap into the win-lose cycle as just the right time, but you will be fighting the odds every step of the way.

Db

PS If you're interested primarily in construction companies, learn to properly assess the condition of the sector and the group as well as the market (doing so would have enabled you to forecast the market top in '08 months early). If no one in the UK groups these stocks for you in this manner, see bigcharts.com (once you get there, click "Industries" then "Real Estate/Construction"; you will then be able to determine whether the sectors and groups and subgroups in which your stock resides are strong or weak). This may or may not include UK stocks, but, unless you're daytrading, it really doesn't matter.

 

[tomorton]

On WOS, last time I checked, though many moons ago, WOS made most of its revenue in the North American market, which makes it an unpredictable UK share to trade. But its TA looks a little more bullish than others around it so it might be worth a punt long.

But that's all it is.

 

[dbphoenix]

One more.

That price bounced off that 18mo range is an encouraging sign. After all, traders spent a long time trading in that range and found value there. Whether they now believe that value may be found higher than that remains to be seen. But price did not re-enter that range. That can be seen by anyone who cares to look.

However, price has so far been unable to rally more than half of its downmove from 4400. Bulls may be able to move past this. Or not. But until the market shows its hand, the prudent approach is, again, to stand aside and judge the market by its own action, not by what the trading forum wise have to say. The market is going to do what it's going to do, regardless of what you or I or anyone else thinks about it.

Db

 

[dbphoenix]

On WOS, last time I checked, though many moons ago, WOS made most of its revenue in the North American market, which makes it an unpredictable UK share to trade. But its TA looks a little more bullish than others around it so it might be worth a punt long.

But that's all it is.

For reasons that are best understood by DJ, WOS is classified as a wholesaler, and the wholesaler chart is not pretty. This is not to say that a stock that is doing better than its group will not be a winner, but the group will be a drag. OTOH, stocks which are resisting the downward pull of their groups are among the first to drive upward when the group breaks and reverses its downtrend.

It's just a question of being patient and of acting at the proper time.

Db

PS Commercial construction has been going sideways since July. Even if WOS is classified as CC, there's nothing here to prompt a buy.

 

[dbphoenix]

FWIW, here's an example of a stock in an undeniable uptrend. And you don't have to draw a thing.

And it's in construction: a homebuilder.

(Can you find the range it broke out of?)

 

[Fattony81]

FWIW, here's an example of a stock in an undeniable uptrend. And you don't have to draw a thing.

And it's in construction: a homebuilder.

(Can you find the range it broke out of?)

I think the range it broke out of was 1350 - 1560?

 

[Fattony81]

Out of curiosity I'm looking at CAT and Disney, not to trade but I really want to try and understand the charts,

Could someone confirm my thoughts, firstly CAT

1) Clear downtrend
2) Downtrend since July 14 (Have I looked back too far?)
3) Price range 68.23 - 72.49
4) Support around 65
5) This is not a good time to open a sell trade due to current price / support
6) Await signs of upward trend and re assess

Secondly Disney


1) Uptrend
2) Uptrend since August 15
3) Price range 98 - 120.34
4) Support around 91
5) Resistance around 120.23
5) This is not a good time to open a buy trade due to current price / resistance
6) Await signs of downward trend and re assess

I'm going to watch this one for a bit tonight to see how it goes, I think the chart is telling me Disney will drop as it has hit the resistance recently and CAT will drop following the downtrend

Thanks

Edit - didnt realise it closed at 9pm UK time so I'll look at 2pm tomorrow

 

[Fattony81]

Really struggling with this, any more pointers would be appreciated

Thanks

 

[Fattony81]

Really struggling with this, any more pointers would be appreciated

Thanks

I've read I should set myself some rules for trading, how many I don't know I need to test this but I've come up with these in no particular order:

1) Set a stop loss based on 1% of balance plus cost of trade
2) Set a auto close at 2% of account balance
3) Work out the trend line
4) check 50sma
5) work out entry point based on last 48 hours trading
6) use auto trades
7) check for rns and cancel trade if any released pre opening

Perhaps my fortune in November was beginners luck, problem is quite often I open the trade in the right direction but it either moves just past the spread or doesn't reach break even, I leave it wanting more for the risk and the price goes the opposite, so either my entry is completely wrong (probably) or my stop loss is too tight

 

[tomorton]

Always start with a plan. Then follow the plan but watch how each element sustains your actions - I don't mean was the trade a winner, you need to be more refined than that. The strength of the plan is what counts at this stage, not the growth of your bank balance. So refine or eliminate criteria that don't help your trade management decisions.

Yes, keep the losses small in relation to the account, but you recognise the danger of over-tight stops: ideally the TA will tell you where to put the initial stop and this will giove you an idea of whether you've let the price have wiggle room so you're not stopped out by meaningless fluctuations.

But you do need some filtering approach as it seems you're a stock-picker at this stage so a really strict set of rules for selecting the right stock too.

 

[Fattony81]

Always start with a plan. Then follow the plan but watch how each element sustains your actions - I don't mean was the trade a winner, you need to be more refined than that. The strength of the plan is what counts at this stage, not the growth of your bank balance. So refine or eliminate criteria that don't help your trade management decisions.

Yes, keep the losses small in relation to the account, but you recognise the danger of over-tight stops: ideally the TA will tell you where to put the initial stop and this will giove you an idea of whether you've let the price have wiggle room so you're not stopped out by meaningless fluctuations.

But you do need some filtering approach as it seems you're a stock-picker at this stage so a really strict set of rules for selecting the right stock too.

Thanks, I use city index and it does say stop < or > a certain figure, I go over this figure, generally 18 points and you could argue that's more than enough to know if you've got it wrong, but I may be right just timed the entry wrong

My initial plan for this was could I earn a few thousand a year to pay towards holidays etc, this seems a world away at the moment, is it a pipe dream or is it really a possibility?

I guess you mean by stock picker I haven't found my market yet, as the suggestion above I have looked at US stocks as well, why there is less risk there in not sure

 

[aag100]

you seem to be in a rush.slow down.focus on your breathing

 

[aag100]

heres what happened to me
i started with using stops and those were taken out to the pip and then reversed.
then i stopped using them and thought i had found the holy grail.where i was getting stopped out,i was still in the position.it might run up a few more points against me but then it would reverse and i would close out with a winner.this worked for a couple of weeks......until i ran up my biggest losses.
back to the drawing board!
then i thought id found another holy grail,doubling up!(even trebling/quadrupling and more!)
if a position had gone against me 20 points or so i would add again(now i only needed 10 points to get back to break even instead of 20).this again worked a couple of weeks....but then ran up the mother of all losses.
this is a long process.im back trying to have some sort of stop loss.you try to maintain yours.

 

[Fattony81]

heres what happened to me
i started with using stops and those were taken out to the pip and then reversed.
then i stopped using them and thought i had found the holy grail.where i was getting stopped out,i was still in the position.it might run up a few more points against me but then it would reverse and i would close out with a winner.this worked for a couple of weeks......until i ran up my biggest losses.
back to the drawing board!
then i thought id found another holy grail,doubling up!(even trebling/quadrupling and more!)
if a position had gone against me 20 points or so i would add again(now i only needed 10 points to get back to break even instead of 20).this again worked a couple of weeks....but then ran up the mother of all losses.
this is a long process.im back trying to have some sort of stop loss.you try to maintain yours.

I initially started with no stop loss, always closed trades in profit and thought bingo, I got caught out with one trade against me and it's been a disaster since, I've learned you need a stop loss no matter what, just at what position

 

[tomorton]

All markets are risky, some less than others but all are high risk if you go in without a system and a stop. At this stage you're a novice pilot and at this low level flying altitude due to your account size and inexperience your main objecive has to be not to cross the Atlantic, its to not fly into telegraph poles. You don't need tight stops, you need the right stops.

 

[aag100]

in my experience,the bigger the time frame,the bigger the stop loss required.
BUT not necessarily!
there are opportune times when you can get away with a 2 point stop on maybe even on an hourly time frame but its a matter of having the patience to wait for something that may not even occur.
so its a question of what are you comfortable with and then having the discipline to accept it(my current struggle(after a good 4 yrs!)

 

[tomorton]

Big stop loss doesn't have to mean big risk. If your stop is 1% of your account, you just size the trade so that 2pts or 20pts still only costs you 1%.

But if 2pts is what your stock generally does up or down every 10 minutes, you're much more likely to see the 2pt stop hit due to unpredictable noise. I like my stop to be hit if its signalling to me that whatever reasons I had for getting in are now invalid - but I can't stand stops getting hit just due to normal price fluctuations, just because say half the professionals in the market popped out for their normal lunch break.